The term VoIP is one that many people are familiar with, especially technology and business experts, and it is perhaps a concept that most of us will be increasingly exposed to in the coming years. But what is it and where does it come from?
The bottom
VoIP stands for Voice over Internet Protocol and while the term may not be very trendy, the technology itself is already commonplace in both our business and personal lives, supporting services like Skype and also being used as phone system for a growing number of businesses – large and small.
In fairly simple terms, the protocol works by taking the input, someone’s voice, and converting or encoding it into small digital packets of data that it then transmits over the Internet infrastructure directly to the recipient on the other end.
Before the advent of VoIP, phone calls were based on the traditional public switched telephone network (PSTN) that dated back to the early days of telecommunications. This system, which uses many different technologies these days, has at its heart a series of physical cables and switches that, depending on the number you dial, direct you to connect with a user on the other side of the network. However, with the growth of the Internet, opportunities arose for people to transfer information through different channels, including, ultimately, information such as voice.
The history
What we would now recognize as VoIP first appeared in the early days of mass Internet use when an Israeli company called Vocaltec launched its InternetPhone service in which users could, with InternetPhone software, speakers, a microphone, and a sound card , talk to each other over the Internet. This service was quite primitive in terms of the quality of service and functionality offered by today’s VoIP providers, but it was the first step for a technology that brought about a revolution in the way we communicate with each other.
In the mid to late 1990s, some competitors entered the market and in 1998 the first phones using VoIP became available. However, the technology failed to reach its potential due to the low bandwidths and therefore poor quality voice signals that most of its potential customers or users had to deal with. However, with the advent of broadband, the benefits of VoIP came to light and the industry boomed. In the five years from 1998 to 2003, the percentage of US voice traffic using VoIP jumped from a meager 1% to a very significant 25%.
The reasons behind this growth remain some of the key drivers of the current service: the low cost compared to PSTN services, the lack of geo-restrictions, and the ever-increasing range functionality that a VoIP service can augment. The need for physical telephone exchanges has been superseded by software-driven systems and businesses throughout the 1990s began to realize that they could set up their own telephone systems for a fraction of the cost, with less physical hardware, and, in addition, employ greater functionality within their communication strategies.
Where are we now
VoIP services can now come in many shapes and sizes to meet the needs of personal users and large businesses alike.
The packages may include IP Phones, which can behave like traditional (digital) telephones, but instead of connecting to the traditional telephone network, they connect to the Internet; VoIP software, which allows users to use a PC or integrate a phone and a PC; and mobile VoIP that brings these elements together on the go and offers the ability to use the service over the Internet via WiFi or a 3G phone signal.
In a personal context, millions of us use services at home like Skype, and as a result, VoIP has become a key element in social networking. Whether using physical phones or PCs, you are now trusted to keep in touch with your loved ones around the world in a way that has never been so accessible or affordable before. In addition, the additional functionality that comes with these services, such as video conferencing and photo sharing, means that we can now share an unprecedented amount of information when socializing, even via mobile devices.
Businesses have enthusiastically embraced Business VoIP, eliminating local on-site exchanges: Large enterprises have been able to easily relocate call centers anywhere in the world to keep their costs down, without the need to physically re-install branch networks and exchanges at each location. Small businesses have kept costs to a minimum while benefiting from flexible and scalable systems that can quickly respond to growth. Increasingly, all businesses are turning to VoIP as part of a unified communications approach where all facets of a business’ communication (email, fax, instant messaging) are integrated so that all dealings with customers, staff , etc. can be managed, registered and linked to each other. – improve both internal communications and customer service levels.
Although VoIP still has many hurdles to overcome, it certainly seems to be here to stay and will undoubtedly play a key role in how we communicate with each other in the 21st century.